Indirect land use directly affects South Dakota producers

May 21, 2009

Midwest corn producers stand to lose critical market access if indirect land use change (ILUC) policy is adopted by the Environmental Protection Agency (EPA). The South Dakota Corn Utilization Council (SDCUC) is promoting the use of proven science when calculating the impacts of biofuels.

“A dangerous precedent was set by California’s recent decision to use unproven science to phase out use of biofuels in that state based on the notion of indirect land use changes,” said David Fremark, president of the SDCUC. “Such pie in the sky decision making will cripple this nation’s biofuels industry and the lack of using conclusive science is irresponsible. The EPA must not make the same mistake.”

What is Indirect Land Use Change (ILUC) and why should South Dakota corn producers care?

As ag producers diligently plant fields this Spring with intentions to provide feedstock for a growing global economy, proposed policy built on pretense is circulating in Congress claiming that when producers plant more corn for ethanol, a domino effect is set into motion, causing consequences in other parts of the world. ILUC is built on the notion that if an acre of corn becomes ethanol, an acre of forest or grassland will be planted to food crops to compensate.

The EPA’s proposed rule for the Renewable Fuels Standard goes out of its way to calculate incalculable impacts of biofuels while giving petroleum a free pass.

The EPA’s own calculations, based on the direct comparison with gasoline, shows ethanol alone reduces greenhouse gas emissions by more than 60 percent. A recently published study in the Journal of Industrial Ecology found that ethanol reduced carbon emissions by up to 59 percent compared to gasoline. Internationally, the International Energy Agency’s Bioenergy Task 39 concluded that ethanol’s ability to reduce greenhouse gas emissions will continue to increase from ongoing innovations using existing technologies.

Unfortunately, the current state of ILUC science is far from conclusive and no consensus exists on how to analyze the potential indirect land use impacts of expanding biofuels production.

There is growing concern that EPA could unfairly interpret and discredit American made ethanol with indirect land use changes that may or may not occur in other countries in around the world. New rules would make it impossible to expand the ethanol industry.

The EPA has attempted to calculate domestic and international indirect emissions resulting from the undeveloped science of land use change, which are thought to greatly reduce ethanol’s GHG benefit.

Unfairly, LUC penalties are enforced against biofuels only, which increases the carbon score of these fuels by 40 percent or more. The problem with such a proposal is two-fold:

1. the science of predicting indirect, economically-derived carbon effects is extremely new and uncertain; and,

2. no level of certainty justifies enforcing economically-derived carbon effects against only one type of fuel.

Here are the facts about ILUC and biofuels production:

One of the main arguments waged by those who believe increased biofuels production will lead to significant indirect land use change is the idea that U.S. corn and soybean exports will drop appreciably, inciting cultivation in other countries to account for the lost volume on the world market. Such an export reduction has not occurred.

A February 2009 study conducted by Air Improvement Resource, Inc. found the current Renewable Fuels Standard requiring 15 billion gallons of corn ethanol by 2015 should not result in new forest or grassland conversion domestically or abroad.

The study states that using a yield improvement path to 183 bushels of corn per acre in 2015, the increase in corn use for U.S. ethanol production can be met without a decline in corn exports or stocks.

A February 2009 study conducted by Dr. Steffen Mueller from the Energy Resources Center at the University of Illinois at Chicago found that a modern ethanol plant does not meaningfully change farmland use, neither the amount of land farmed nor the mix of crops planted.

In 2007/08, just 0.9 percent of world major cropland was needed (on a gross basis) to meet the grain requirements of the U.S. ethanol industry. When the ethanol industry’s production of feed co-products are factored in, the net use of global cropland for U.S. ethanol production was 0.6 percent, or an area roughly the size of the state of West Virginia.

Although U.S. ethanol production is expected to grow in the years ahead, the amount of land needed to support U.S. ethanol demand will continue to be small compared to world agricultural land use. Projections from Informa Economics suggest the land required to 15 billion gallons of grain ethanol in the United States in 2015 amounts to less than 1 percent of world cropland.

“It is the sensationalism of issues like ILUC that creates confusion and undermines the ability of the nation to make progress on reducing our nation’s dependence on foreign sources of oil while decreasing green house gas emissions,” said Fremark. “It’s time to stop placing value on blatant speculation and start moving meaningful solutions forward.